Tiny electric cars and drones get freedom to roam
The government on Wednesday held a joint ministerial and private sector meeting, hosted by President Park Geun-hye at the Blue House in central Seoul, to review regulation reforms.
The meeting discussed various issues to vastly improve regulations that have been holding back the establishment of new businesses, as well as enhance competition in areas such as the Internet of Things, drones, autonomous vehicles, bio and health.
According to the government, the goal is to ease or eradicate 303 regulations that are deemed to be obstructing the development and progress of new businesses.
The deregulation is expected to generate an economic effect of 4 trillion won ($3.4 billion) in the next three years while contributing to the creation of 13,000 jobs.
One of the biggest changes expected with changes in regulations is the appearance of compact electric vehicles (EV), such as the Twizy from Renault Samsung Motors.
In May last year, the Korean operation of Renault announced plans for its Twizy compact electric vehicle to be used as a delivery vehicle for the Korean chicken franchise BBQ. However, the Ministry of Land, Infrastructure and Transport canceled the temporary license on the compact EV, as there were no regulations on compact EVs, including safety standards.
Although it runs on four wheels, the compact EV is structurally different, as it is one-third the size of a normal passenger car and therefore does not fit the category of a passenger car or even a motorcycle.
The two-passenger Twizy runs on a lithium battery manufactured by LG Chem. It can cover up to 100 kilometers (60 miles) when fully charged and has a maximum speed of 80 kilometers per hour.
It has been considered as convenient next-generation urban transportation, and more than 18,000 units have been sold in Europe.
At Wednesday’s meeting, the Transport Ministry said it will allow compact EVs to run on Korean roads if it meets foreign guidelines on safety and performance. The Twizy already meets safety standards in Europe.
Following the government decision, Renault Samsung Motors said it plans to introduce the Twizy to the Korean market in the second half of this year.
Additionally, the Transport Ministry said it will allow autonomous vehicles to be tested on all roads in Korea. The only exception will be school districts, due to safety concerns. There are currently only six areas that allow autonomous vehicles to be test-driven.
The drone industry will also benefit from deregulation. The government is planning to allow the use of drones as long as they do not threaten public safety.
The drone industry is one of the fastest-growing areas, with an average annual expansion of 15 percent. However, until now, drones have been limited to assist in agricultural cultivation, aerial filming, exportation and flight training.
The government will no longer demand drone start-ups that operate small-size drones of 25 kilograms (55 pounds) or lighter to fulfill a capital requirement. Previously, all drone companies had to have capital of 30 million won.
The government is also planning to set up Internet of Things networks to propel high-tech businesses and allow taxies to use an app as a replacement for conventional meter machines in hopes of further advancing online-to-offline business.
The testing of new drugs will be made easier to help the bio industry expand. The government will now allow expedited development of drugs by only requiring animal testing, but only in emergency situations like the recent outbreak of Middle East respiratory syndrome.
During the meeting, President Park stressed the urgency and necessity of enforcing the deregulations.
“There is an old saying that if you only cut the grass and forget to pull out the roots, the old grass will grow back,” President Park said. “Regulation reform is endless, like weeds that keep growing no matter how often you keep pulling them out. Regulation can only succeed when you pull out the root with persistence and patience.”
She also stressed that regulation reform has its own “golden time” and therefore should be dealt with swiftly.
“Our companies’ global market share could be taken away if the laws and regulations fail to catch up to the changes of new industries,” the president said, demanding a bold and “destructively innovative” process that can surprise the world.
Since the beginning of the year, there has been strong public criticism as several startups - including a used-car sales app developed by college students and a late-night bus service similar to Uber - were forced to either close or postpone their businesses because of regulatory restrictions.
With the Korean economy struggling with low expansion, especially posting a 0.4 percent quarterly expansion in the first three months, there has been growing urgency for structural reform of the Korean economy, especially encouraging high-tech businesses to become new growth engines.
BY LEE HO-JEONG, KIM JEE-HEE [firstname.lastname@example.org]